Cash and licensing solve IBM/Amazon patent dispute

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the ongoing patent dispute between amazon and ibm has finally come to an end; amazon agreed to pay ibm and start a long-term licensing deal.

the dispute started back in 2002 when ibm approached amazon about licensing requirements for technology it was using on its site. move forward to 2006, and–with no licensing terms agreed–ibm sues amazon for violating patents 5,442,771 (method for storing data on an interactive network), 5,446,891 (adjusting hypertext link with weighted goals and activities), and 5,319,542 (ordering items using an electronic catalogue).

amazon later fought back with its own lawsuit, claiming ibm was indeed infringing on some of its patents and that the patents ibm was trying to license were too broad. amazon also accused ibm of waiting until the company was profitable before approaching it about the suggested patent infringements. the two companies have been locked in a stalemate of patent lawsuits until now.

the sum of money amazon has now agreed to pay hasn't been disclosed nor have the terms of the licensing deal. it does, however, allow amazon to use a number of ibm's web technologies.

speaking of the agreement, dan cerutti, ibm's general manager of intellectual property, said:

at ibm, we place a high value on our ip assets and believe this agreement substantiates the value of our portfolio. we're pleased this matter has been resolved through negotiation and licensing. we look forward to a more productive relationship with amazon in the future

matthew's opinion
it sounds to me as if ibm was the winner in this case, but–from briefly looking at the patents the company used–they are very broad, and this will set a precedent for other cases.

amazon does now have access to ibm technology, and this may allow the company to introduce new features to its stores more freely, but recouping whatever sum of money it paid is still going to take time. the long-term licensing deal is also bound to be costing the company money.

although patent law is meant to protect the rights of companies and individuals who innovate, i can't help but see it mainly as a tool for extracting money from others right now. since the sole purpose of some companies is to exploit patents, i fear it isn't going to get any easier for businesses trying to function in the modern technology-heavy world.